FLT reactivates Escape franchising, outlines VI plans

Issues & Trends

FLT reactivates Escape franchising, outlines VI plans

FLIGHT Centre is reactivating its Escape Travel franchise business model just as JTG franchisees are grappling with decisions over whether or not to transition to new helloworld agreements.

The move was foreshadowed earlier this year by Flight Centre managing director Graham Turner in an interview with travelBulletin. “We are quite interested to talk (to potential franchisees),” he said (travelBulletin, May).

Turner acknowledged that the comp any had only a few franchisees among Escape Travel’s 130-plus outlets but maintained the franchise operation is now “going well, although it took a while”.
Flight Centre’s chief operating officer Melanie Waters-Ryan followed up those comments this month, unveiling details of the new push to recruit franchisees.

Waters-Ryan acknowledged that the franchising operation, launched in late 2005, has been virtually dormant in recent years. (Only eight of nearly 140 outlets are currently franchised.) She said this was because the company had decided to focus “on growing its stable of leisure and corporate travel brands in Australia”.

In comments that will inevitably be seen as a reference to the shake-up taking place within JTG, Waters-Ryan said Escape Travel is now reactivating its franchise model “at a time when significant change is under way in the Australian travel industry’s franchise sector … Already, we are being approached by agents who are affiliated to other franchise groups”.

Announcing the move, Waters-Ryan said: “Escape Travel is a growing brand with an expanding nationwide presence of almost 140 shops and a track record of success.

“Franchisees will have access to Escape Travel’s global product range and the advertising, branding and marketing structures that have underpinned FLT’s growth.

“Other potential benefits include access to IT systems and related support services, centralised air ticketing, training and development programs, including staff conferences and FLT’s Global Sales Academy, group buying/procurement for ancillary business products and wages and incentive structures.”

• In other developments this month, Flight Centre has elaborated on vertical integration plans outlined by Turner in his travelBulletin interview.

In May, Turner said the company is looking for opportunities to diversify into areas of the travel industry beyond distribution and is considering possible ventures in Bali, Fiji and Phuket.
He said equity participation, along the lines of its 66 per cent holding in UK-based Back-Roads Touring, is one option open to the company.

Elaborating on this in a presentation to this month’s RBS Morgans Institutional Conference, Flight Centre chief financial officer Andrew Flannery specified destination management companies and coach touring companies as potential “strategic acquisitions from time to time”.

Echoing Turner’s comments to travelBulletin, Flannery said Flight Centre will not be taking on “major capital assets”.

Turner specifically ruled out acquiring hotels but Flannery revealed hotel management arrangements are a possibility.


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